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Business
Business Concentrates
February 16, 2004
| A version of this story appeared in
Volume 82, Issue 7
Japanese chemical companies are expressing concerns about the strengthening yen, even though several of them performed extremely well in the first nine months of the fiscal year that will end March 31. Mitsubishi Chemical nearly achieved its full-year profit goal of $285 million with nine-month net income of $280 million on sales of $13.5 billion. Mitsubishi credited economic recovery in Asia and the U.S. for its performance. JSR Corp. reported net income of $190 million on sales of $1.9 billion. This nine-month net already exceeds its full-year forecast, released a few months ago, by 21%. JSR's synthetic rubber and electronic materials businesses both experienced strong sales. Sumitomo Chemical reported net income of $223 million, representing 70% of its full-year goal, on sales of $8.0 billion. Sumitomo's electronic materials business performed particularly well. Its foreign agrochemical sales were also strong, but profit expressed in yen was reduced by the strength of the currency. Blaming feedstock prices, the strong yen, and the bankruptcy of a subsidiary, Mitsui Chemicals lowered its profit outlook for the full year from $180 million to $115 million. The company reported net income of $104 million on sales of $7.6 billion for the first nine months.
Fisher boosts biotech stake
Fisher Scientific International has entered definitive agreements to acquire Oxoid Group Holdings for $330 million and Dharmacon for $80 million. Oxoid, with annual sales of $155 million, is a leading maker of microbiological culture media for research. Dharmacon, with $17 million in annual sales, calls itself the global leader in RNA technologies such as RNA interference. Fisher CEO Paul M. Montrone says the deals complement his firm's 2003 acquisition of the biotechnology consumables firm Perbio Science and expands its biochemicals business.
Givaudan opens Singapore lab
Givaudan has completed a technology center in Singapore intended to be its center of expertise for Asian ethnic flavors. Part of a $20 million expansion that includes a fragrance technology center to be completed in the next few months, the flavor facility will house 50 research scientists, pilot-plant equipment, and a new training center. Because of strong demand for flavors and fragrances throughout Asia, the firm is building a fragrances plant in Shanghai and is increasing flavors capacity in Japan, a spokesman says.
Pharmacopeia shifts R&D
Pharmacopeia will reorganize R&D at its Accelrys molecular modeling and informatics unit, moving all bioinformatics work to its Bangalore, India, facility; all materials science work to its Cambridge, England, facility; and all chemical informatics to its site in San Diego. There will be unspecified staff reductions in San Diego, its largest facility, but the company plans to increase worldwide R&D staff by 20%, according to Chief Financial Officer John J. Hanlon. The moves, he says, will generate annual savings of up to $2 million. Meanwhile, the company is consolidating research at Pharmacopeia Drug Discovery to one of two labs in Princeton, N.J., saving about $2 million per year. Hanlon says the firm is on schedule to spin off PDD next month (C&EN, Jan. 5, page 13).
Biotech firm joins Arsenal
Private equity firm Arsenal Capital Partners has acquired Scientific Protein Laboratories, a Wisconsin-based producer of heparin and pancreatin, from Wyeth for $81 million. Arsenal plans to leverage SPL's current Good Manufacturing Practices-compliant extraction and purification capabilities "into other markets to create growth," Managing Director James Marden says. The investment firm purchased Rutherford Chemicals, the specialty chemicals business of Cambrex, for $65 million late last year.
Dow fiber in fashion stretch
Dow Chemical's new XLA olefin elastic fiber will make its U.S. debut in the spring 2004 shirt collection from the Perry Ellis fashion house. Combined with cotton, the fiber will offer a soft stretch while enabling the cotton to retain a soft, natural feel, Dow says.
Avecia has added an early-phase production unit to its oligonucleotides plant in Grangemouth, Scotland. The $1 million expansion will come onstream this spring, adding the capability to manufacture in 2- to 100-g batches. The unit is intended to supply European customers with material for preclinical through Phase II clinical trials. Avecia says the plant now matches the capabilities of its oligonucleotides operation in Milford, Mass.
NuSil acquires two companies
NuSil Technology, a silicone compounds specialist, has agreed to acquire Lightspan, a small provider of polymeric materials and testing services for the fiber-optics and photonics industries. NuSil says it will move Lightspan's output to Carpinteria, Calif., maintaining its Wareham, Mass., location for technical services and development. Separately, NuSil has acquired Morehouse-Cowles, a maker of equipment for milling, mixing, and dissolving. NuSil, which has annual sales of more than $50 million, says the Morehouse acquisition has increased its sales by about 10%.
Sasol becomes an oxygen giant
Sasol has inaugurated an oxygen plant at its Secunda site near Johannesburg, South Africa. The $100 million plant is Sasol's 15th at the site, bringing its total capacity to 38,550 metric tons per day and making it the world's largest single producer and consumer of oxygen. Sasol uses almost 80% of its oxygen in the Fischer-Tropsch coal gasification process and the remainder for gas reforming. Sasol uses Air Liquide technology for all the oxygen plants in Secunda; it supplies bulk xenon and krypton from the plants directly to Air Liquide.
Employment drops again
The new year began with yet another decline in chemical employment, as January marked the sixth straight month of payroll cutting in the industry. Total seasonally adjusted employment, according to the Labor Department, was 893,600, down 2,600 from December and down 27,400 from January 2003. There were 518,300 production workers employed in January, down 4,000 from the previous month and down 11,700 from the same month last year. However, they were working longer. The average workweek for January was 42.5 hours, up from 42.3 hours in December and from 42.2 hours in January a year earlier.
French firm goes bankrupt
IFraChem, formed in 1998 from Witco's former St. Pierre les Elbeuf, France, surfactants operation, has filed for creditor protection. IFraChem founder Kenneth Schofield, head of InChem Holdings, says he regrets the filing but claims overstaffing and high wages have rendered the plant uncompetitive; efforts to negotiate a restructuring with the unionized workforce have failed, he adds. French authorities have removed IFraChem President Mark Lawrence and appointed an outside administrator. Schofield says he will appeal this decision, anticipating "massive customer and supplier resistance" if Lawrence isn't reinstated.
Praxair wins gas contracts ...
Praxair has won a contract to supply nitrogen and oxygen to the $4.3 billion ethylene complex that Shell Chemicals and China National Offshore Oil Corp. are building in Guangdong province, China. By May 2005, Praxair plans to build two air separation units adjacent to the complex. Praxair also intends to supply the merchant Guangdong market for oxygen, nitrogen, and argon. Separately, Praxair has won a contract to supply hydrogen to Solvay Chemicals' hydrogen peroxide unit in Deer Park, Texas. Praxair is in the process of adding 300 million cu ft per day of hydrogen capacity to its Gulf Coast pipeline system.
... as do BOC and Air Products
BOC says it has won more than 90% of the gases business in the China-Singapore Suzhou Industrial Park and the Suzhou New District industrial park in Jiangsu province. BOC was the first industrial gases company to invest in China two decades ago and says it is the largest supplier in China and Asia today. Air Products & Chemicals, meanwhile, is boosting supply to electronics customers in South Korea. It has commissioned an air separation plant to feed the Gumi pipeline; it has commissioned an air plant feeding Samsung's thin-film transistor liquid-crystal display facility in Cheonan; and it has begun building a third air plant feeding Samsung's memory-chip complex in Gihueng.
ChemBridge, Pfizer up deal
ChemBridge and its ChemBridge Research Laboratories affiliate have extended and expanded a discovery chemistry agreement with Pfizer. The two announced a deal in early 2002 in which some 100 ChemBridge/CRL scientists in the U.S. and Russia would develop combinatorial compound libraries for Pfizer. Under the revised deal, the relationship will be extended from mid-2006 until the end of 2008. In addition, ChemBridge will now offer discovery chemistry, including medicinal chemistry support, to Pfizer. Separately, CRL says it has successfully completed its first collaboration with Merck KGaA.
Ranbaxy enters R&D agreement
Ranbaxy will cooperate with India's Institute of Nuclear Medicine & Allied Sciences to screen and evaluate the company's formulations and drug delivery systems. Inmas is part of the country's Defense Research & Development Organization, which performs both civilian and military research. Inmas has developed a method called pharmaco-scintigraphy that allows it to precisely visualize where oral, pulmonary, and other technologies are delivering drugs, according to Ranbaxy.
BUSINESS ROUNDUP
- Stepan is out of compliance with certain covenants in its U.S. loan agreements following a fourth-quarter loss of $3.4 million. The company says it is continuing discussions with its lenders to obtain an amendment or waiver.
- ArQule will lay off up to 55 employees because of a reduced need for staff to support its chemistry alliance with Pfizer. At the same time, it will recruit employees to back its effort to become an oncology drug company.
- InnoCentive has launched Korean and Japanese versions of its scientific problem-solving website. The expansions were announced at press conferences in Seoul and Tokyo last week.
- China will levy antidumping duties as high as 144% on phenol made in Japan, the U.S., Taiwan, and South Korea. Japan's largest producer, Mitsui Chemicals, escaped with a modest levy of 6%. All U.S. producers will pay 36%.
- Cabot and partner Shanghai Coking have expanded their carbon black plant in Shanghai by more than 60% to 130,000 metric tons per year. Cabot says it also plans to build a laboratory in Shanghai to support its customers in the Asia-Pacific region.
- Solvay will sell its 38% stake in European Salt Co., a salt joint venture, to Germany's K+S, which holds the other 62%. European Salt was set up in 2001 to produce and distribute salt for human consumption, animal feed, de-icing, and water softening. Solvay retains production of salt for captive use.
The power is now in your (nitrile gloved) hands
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